— Cannabis Business Tax —

City of Half Moon Bay

Measure AA - Majority Approval Required

Copiar un enlace

Contenido incorporable

To learn more about measures, follow the links for each tab in this section. For most screenreaders, you can hit Return or Enter to enter a tab and read the content within.

Resultados electorales

Passing

3,324 votos si (60.67%)

2,155 votos no (39.33%)

Shall an ordinance be adopted to tax any cannabis business operating within the City at annual rates not to exceed $2.00 to $10.00 per square foot for cultivation (inflation adjustable), and 6% of gross receipts for retail, 2.5% for testing, 3% for distribution, and 4% for manufacturing, levied until repealed, estimated to raise at least approximately $64,000 annually from deliveries and potentially more if other businesses are allowed, to fund general City services and expenses?

This measure is an ordinance that was placed on the ballot by the City Council for the City of Half Moon Bay. If approved, the Measure would amend the Half Moon Bay Municipal Code to establish a new cannab is business tax.

"Cannabis" is also known as "marijuana."

The Municipal Code currently prohibits cannabis businesses. This Measure would not change that prohibition.

The Municipal Code currently requires most businesses conducting transactions in the City to pay a general business tax of between $100 and $15,25 annually. This Measure would impose a cannabis-specific business tax on cannabis businesses that could exceed those rates.

The tax would apply to businesses that deliver cannabis to Half Moon Bay from outside the City. It would also apply to other tpes of cannabis business that might be allowed in the future, if the City's current ban is amended by the voters or the City Council. For instance, the tax would apply to cannabis nurseries that could be established if a separate measure on this ballot passes.

The tax proposed by the Measure is a general tax which means that the proceeds could be used by the City for any municipal governmental purpose. This includes funding City services and expenses.

A consultant for the City estimated potential tax revenues from various types of cannabis businesses. Based on mid-point estimates in that report, the Measure can be expected to generate approximately $64,000 annually from cannabis delivery businesses. If the City alowed commercial cannabis greenhouse cultivation, retail sales, and manufacturing, the Measure can be expected to generate approximately $692,000 annually, based on the low tax-rate estimates in the report, and more if higher tax rates are imposed.

The Measure authorizes the City Council to set and adjust the rate of the tax up to a maximum rate. The Measure sets the maximum for each type of business as follows:

* Cultivation: $10.00 per square foot of canopy in a facility that uses exlusively artificial lighting. $7.00 per square foot of canopy in a facility that uses a combination of natural and artificial lighting. $4.00 per square foot of canopy in a facility that uses no artificial lighting. $2.00 per square foot of canopy for a nursery. Starting in 2022, these maximum rates increase to reflect inflation.

* Testing laboratories: 2.5% of gross receipts

* Retail sales (dispensary or delivery): 6% of gross receipts

* Distribution: 3% of gross receipts

* Manufacturing and processing: 4% of gross receipts

On July 31, 2018, the City Council set initial tax rates that are lower than these maximum rates which would go into effect if the Measure passes.

The Measure includes procedures for tax reporting, remittance, and enforcement.

The City Council could repeal or amend the cannabis business tax ordinance without a vote of the people, subject to constitutional exceptions. The tax would stay in effect until it is repealed.

A "Yes" vote is a vote to approve the Measure.

A "No" vote is a vote to reject the Measure.

This Measure must receive a majority of "yes" votes to pass.

— Catherine Engberg, City Attorney

Argumento EN CONTRA

According to the the City of HMB, 69% of voters favored Proposition 64 which legalized a regulated cannabis industry statewide two years ago. These cannabis ballot measures are a continuation of the process to implement a local, regulated cannabis industry in alignment with the mandate of our voters from 2016.

The Coastside Cannabis Coalition does not support this measure to tax any cannabis business operating within the City at the rates prescribed by this measure.

We strongly support a fair and common sense taxation structure on all cannabis businesses operating within the City to fund general City services and expenses but the rates set out in this measure will completely stifle a local, regulated cannabis industry.

Taxes are part of a regulated market and should be required as part of any commercial activity in HMB - especially the currently operating out-of-town delivery services. However, the tax rates here are prohibitively high and will severely limit the ability of our local patients to afford their medicine and the ability of our local farmers and entrepreneurs to operate local cannabis businesses.

Salinas and Monterey County learned this lesson the hard way when their initially high cannabis taxation structure nearly put their local businesses under while encouraging growth of the illegal market. In May of this year, they slashed their cannabis taxation rates to fix this problem - bringing cultivation tax below $5-8 per square foot, retail sales at 4%, testing labs at 1%, and manufacturers and distributors at 2.5%. This movel ultimately expanded the tax base and made up for the initial drop in revenue.

We support the City Council in developing and implementing a more balanced and strategic tax regulation that more closely follows the market and will not limit the ability of a local cannabis industry to exist and contribute to our community.